Bitcoin Open Interest Falls To $37B—Does This Spell Trouble for BTC?
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An open interest in Bitcoin trading is a key indicator for evaluating current digital assets in the market, including potential price movements.
Theoretically, the increase in Bitcoin Open interest Liquidity is recommended, which can also support ongoing price trends.
According to the latest GlassNode data, Bitcoin’s OI fell from $57 billion to $37 billion, or 35% loss, as the world’s highest digital assets reached an all-time high.
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Interestingly, Bitcoin hit an all-time high of $108,786 on January 20, a day that marks the second term of U.S. President Donald Trump.
Bitcoin At the time of writing, the transaction price was between $83,000 and $86,000, down more than 22% from the peak.
Bitcoin Open Interest and Its Possible Impact on Price
Investors and holders use open interest indicators to assess the emotional and potential market performance of assets.
Digital assets with open interest mean that traders and investors close their positions due to uncertainty or lack of confidence or getting rid of leveraged trading.
Futures open interest fell from $57B to $37B (-35%) since #bitcoinATH signal reduces speculative and hedging activity. This decline reflects the contraction seen in chain liquidity, which suggests a wider behavior. pic.twitter.com/xpbxihxlrs
– Glass Node (@GlassNode) March 20, 2025
In GlassNode’s analysis, the decline in Bitcoin OI reflects a broader trend in reducing chain activity and sewage, where investors have less confidence in assets.
The current situation of Bitcoin shows that most investors are now looking for short-term transactions to grow rapidly, but at the expense of long-term positions.
Changes in position – Glass Festival
According to GlassNode, traders and investors are now in cash and carry trade states with weaker positions in the long term. It added that CME futures closures and ETF outflows reflect changes in investor strategies and also increase sales pressure.
Similarly, the availability of ETFs with less liquidity than futures may affect the short-term market volatility of Alpha Crypto.
Data highlights heat source metrics
The Glass Festival also emphasizes the heat source measurement of assets. This is another important indicator that can track Bitcoin holdings in a week or less.
According to the same Twitter/X thread, these numbers have dropped from 5.9% of total loop BTC to 2.8%, reflecting more than 50% of the decline in the past three months.
The decline in hot supply shows that fewer new bitcoins are being traded in the market, thus reducing liquidity of assets.
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GlassNode further painted a slump picture of Bitcoin by explaining that exchange inflows dropped from 58,600 bitcoins per day to 26,900 bitcoins, a 54% reduction.
This Bitcoin trend indicates weaker demand as fewer assets turn to crypto exchanges.
Featured images from Olhar Digital, charts from TradingView
